Amendment sch3629a-5

sch3629a-5 sch3629A-5

1.1Senator Hemmingsen-Jaeger moved to amend H.F. No. 3629 as follows (...):
1.2Page 1, after line 5, insert:

1.3    "Section 1. Minnesota Statutes 2025 Supplement, section 15.013, is amended to read:
1.415.013 PROGRAM PAYMENTS WITHHELD; FRAUD.
1.5    Subdivision 1. Definitions. (a) For purposes of this section, the following terms have
1.6the meanings given.
1.7(b) "Entity" means any corporation, partnership, proprietorship, firm, enterprise, franchise,
1.8association, organization, or any other legal entity that engages in either nonprofit or
1.9profit-making activities.
1.10(c) "Evidence" means credible evidence obtained from an internal agency investigation,
1.11audits, court records, law enforcement investigations, or investigations by other state or
1.12federal agencies.
1.13(d) "Fraud" means an intentional or deliberate act to deprive another of property or
1.14money or to acquire property or money by deception. Fraud includes knowingly submitting
1.15false information to a federal, state, or local government entity for the purpose of obtaining
1.16a greater compensation or benefit than the person is legally entitled. Fraud also includes
1.17acts that constitute a crime against any program, or the attempts or plans to commit those
1.18crimes, including but not limited to theft in violation of section 609.52, perjury in violation
1.19of section 609.48, and aggravated forgery and forgery in violation of sections 609.625 and
1.20609.63, and substantially similar federal laws.
1.21(e) "Individual" means a natural person.
1.22(f) "Program" means any program funded by a state or federal agency that involves the
1.23transfer or disbursement of public funds or other public resources.
1.24(g) "Program participant" means an entity, or an individual on behalf of an entity, that
1.25receives, disburses, or has custody of funds or other resources transferred or disbursed under
1.26a program.
1.27(h) "Agency" has the meaning given in section 16B.01, subdivision 2, and includes the
1.28Minnesota State Colleges and Universities.
1.29    Subd. 2. Administrative withholding of payments. (a) The head of an agency may
1.30withhold payments to a program participant in a program administered by that agency for
1.31a period not to exceed 60 days if the agency head determines that a preponderance of the
2.1evidence shows that the program participant has committed fraud to obtain payments under
2.2the program.
2.3(b) Notwithstanding subdivision 3, the agency head must notify the program participant
2.4of the decision to withhold payments at least 24 hours before withholding a payment. The
2.5notice must:
2.6(1) state that payments will be withheld in accordance with this section;
2.7(2) state the date the administrative withholding of payments is effective;
2.8(3) state the reasons for withholding payments, excluding specific information that may
2.9jeopardize an active investigation;
2.10(4) state the date the administrative withholding period terminates;
2.11(5) inform the program participant of the right to submit written evidence for
2.12consideration by the agency head; and
2.13(6) inform the program participant of their rights under chapter 14 to appeal the decision
2.14to withhold payment.
2.15(c) Following notice and to the extent practicable, the agency must ensure that any person
2.16whose public funds are interrupted and who is not implicated in the suspected fraud receives
2.17notice of their rights related to continued receipt of the public funds, services, or programs
2.18for which they are eligible. The agency head must provide a point of contact for the impacted
2.19persons.
2.20(d) A program participant may appeal an agency head's decision under this subdivision
2.21by initiating a contested case proceeding under chapter 14 or by petitioning the court for
2.22relief, including injunctive relief.
2.23(e) This subdivision does not apply if an agency is precluded from withholding payments
2.24to a program participant by federal law or obligations under a contract.
2.25    Subd. 3. Data classification and access. (a) During the administrative payment
2.26withholding period under subdivision 2, data relating to evidence of fraud are classified as:
2.27(1) confidential data on individuals pursuant to section 13.02, subdivision 3; or (2) protected
2.28nonpublic data pursuant to section 13.02, subdivision 13, in the case of data not on
2.29individuals.
2.30(b) All data relating to evidence of fraud become public at the termination of the
2.31withholding period unless classified as not public data under state or federal law. The identity
2.32of a complainant is private data on individuals, as defined in section 13.02, subdivision 12.
3.1(c) An agency may disclose data classified as confidential or protected nonpublic under
3.2this section to a federal, state, or local government agency or a law enforcement agency if
3.3the agency determines that access will help prevent fraud against public programs or aid
3.4the law enforcement process.
3.5    Subd. 4. Court order. The head of an agency may petition the court for a temporary
3.6order pursuant to Rule 65 of the Minnesota Rules of Civil Procedure to withhold payments
3.7to a program participant in a program administered by that agency if the agency head
3.8determines that a preponderance of the evidence shows that the program participant has
3.9committed fraud to obtain payments under the program.
3.10    Subd. 5. Report. (a) An agency that has withheld a payment under this section must
3.11report the following to the commissioner of management and budget by March 1, 2026:
3.12(1) the number of program participants from whom payments have been withheld;
3.13(2) a description of the reason the payments were withheld from the program participant;
3.14(3) the dollar amount of payments withheld;
3.15(4) the identification of the program;
3.16(5) whether the payments withheld were state or federal funds; and
3.17(6) whether the withholding of payment was challenged by a program participant and
3.18the outcome of the challenge.
3.19(b) The commissioner of management and budget must compile the reports from the
3.20agencies under paragraph (a) and submit the compiled report to the chairs and ranking
3.21minority members of the committees in the house of representatives and the senate with
3.22jurisdiction over state government, judiciary, health and human services, and education by
3.23March 15, 2026.
3.24    Subd. 6. Sunset. This section expires July 1, 2027.
3.25    Subdivision 1. Definitions. (a) For purposes of this section, the following terms have
3.26the meanings given.
3.27(b) "Credible allegation of fraud" means an allegation of fraud that has been verified by
3.28the head of a state agency from any source, including but not limited to fraud complaints;
3.29patterns identified through audits, civil cases, law enforcement investigations, or
3.30investigations by other state or federal agencies; and court filings and other legal documents,
3.31including but not limited to police reports, complaints, indictments, information, affidavits,
3.32declarations, and search warrants.
4.1(c) "Fraud" means an intentional or deliberate act to deprive another of property or
4.2money or to acquire property or money by deception or other unfair means. Fraud includes
4.3intentionally submitting false information to a federal, state, or local government entity for
4.4the purpose of obtaining a greater compensation or benefit than that to which the person is
4.5legally entitled. Fraud also includes acts which constitute a crime against any program, or
4.6the attempts or plans to commit a crime against any program, including but not limited to
4.7theft in violation of section 609.52; perjury in violation of section 609.48; and aggravated
4.8forgery and forgery in violation of sections 609.542, 609.625, and 609.63, and substantially
4.9similar federal laws.
4.10(d) "Individual" means a natural person.
4.11(e) "Program" means any program funded by a state or federal agency that involves the
4.12transfer or disbursement of public funds or other public resources.
4.13(f) "Program participant" means any entity or individual that receives, disburses, or has
4.14custody of funds or other resources transferred or disbursed under a program.
4.15(g) "State agency" means any department or agency of the state as defined in sections
4.1615.01 and 15.012.
4.17    Subd. 2. Withholding of payments. (a) Except as otherwise authorized and to the extent
4.18permitted by federal law, the head of any state agency may withhold payments to a program
4.19participant in any program administered by that agency if the agency head determines the
4.20program participant is the subject of a credible allegation of fraud under investigation that
4.21is related to any program administered by that agency. The head of any agency may also
4.22withhold payments to a program participant in any program administered by that agency if
4.23another agency head has determined there is a credible allegation of fraud under investigation
4.24and the program participant is a subject of the investigation.
4.25(b) The state agency head must send notice of the withholding of payments to the program
4.26participant within five days of taking such action. The notice must:
4.27(1) state that payments are being withheld in accordance with this section;
4.28(2) state the reasons for withholding payments, but need not disclose specific information
4.29concerning an ongoing investigation;
4.30(3) state that the withholding is for a temporary period and cite the circumstances under
4.31which withholding shall be terminated; and
4.32(4) inform the program participant of the right to submit written evidence for
4.33consideration by the state agency head.
5.1(c) Following notice, to the extent practicable, the agency must ensure that any person
5.2whose public funds are interrupted and who is not implicated in the suspected fraud receives
5.3notice of their rights to continued receipt of the public funds, services, or programs for
5.4which they are eligible. The agency head must provide a point of contact for persons
5.5impacted.
5.6(d) If the agency head withholds payments under this subdivision, the provider, vendor,
5.7individual, associated individual, or associated entity has a right to request administrative
5.8reconsideration. A request for administrative reconsideration must be made in writing,
5.9stating with specificity the reasons the payment withholding decision is in error, and include
5.10documents to support the request. Within 60 days after receipt of the request, the agency
5.11head shall judiciously review allegations, facts, evidence available to the agency head and
5.12information submitted by the provider, vendor, individual, associated individual, or associated
5.13entity to determine whether the payment withholding should remain in place.
5.14(e) The withholding of payments shall not continue after the state agency head determines
5.15there is insufficient evidence of fraud by the program participant, or after legal proceedings
5.16relating to the alleged fraud are completed, unless the state agency head is authorized by
5.17law to take additional action against the program participant and complies with all
5.18requirements in law to take such action.
5.19(f) The withholding of payments is a temporary action and is not subject to appeal under
5.20chapter 14.
5.21(g) This section does not supersede any other section of law authorizing withholding of
5.22payments, including but not limited to sections 127A.21, subdivision 5; 142A.12, subdivision
5.235; 245.095, subdivision 5; and 256B.064, subdivision 2, paragraph (b).
5.24    Subd. 3. Data classification and access. (a) During the payment withholding period
5.25under this section, all data relating to a credible allegation of fraud under this section are
5.26classified as: (1) confidential data on individuals pursuant to section 13.02, subdivision 3;
5.27or (2) protected nonpublic data pursuant to section 13.02, subdivision 13, in the case of data
5.28not on individuals.
5.29(b) Except for the identity of a complainant, after a determination has been made under
5.30subdivision 2, paragraph (e), that withholding of payments shall not continue, all data relating
5.31to a credible allegation of fraud under this section become public unless classified otherwise
5.32under state or federal law. The identity of a complainant is private.
5.33(c) Any state agency may disclose any data classified as confidential or protected
5.34nonpublic under this section to any federal, state, or local government agency, or any law
6.1enforcement agency, if the state agency determines that access will help prevent fraud
6.2against public programs or aid the law enforcement process."
6.3Page 2, after line 30, insert:

6.4    "Sec. 6. Minnesota Statutes 2024, section 142A.03, is amended by adding a subdivision
6.5to read:
6.6    Subd. 36. Program integrity report. Beginning January 1, 2027, and annually thereafter,
6.7the commissioner must provide a report to the chairs and ranking minority members of the
6.8legislative committees with jurisdiction over children, youth, and families on program
6.9integrity functions within the Department of Children, Youth, and Families. The report must
6.10include:
6.11(1) an update from the Office of Inspector General at the Department of Children, Youth,
6.12and Families with historical metrics and descriptive data, including the office's capacity to
6.13meet licensing demands and data for the past five years on the number of maltreatment
6.14reports and licensing complaints received, the results of maltreatment investigations, the
6.15number of licenses issued for each provider type, the number of licensing investigations
6.16and reviews completed, and the number of correction orders issued; and
6.17(2) an update from the Office of Inspector General at the Department of Children, Youth,
6.18and Families that includes summary data related to caseload, site visit data, the number of
6.19child care assistance program investigations and administrative reviews within the past five
6.20years, recipient fraud investigation results involving multiple benefits from the past five
6.21years, and updates on closed major fraud investigations.

6.22    Sec. 7. Minnesota Statutes 2024, section 256.01, is amended by adding a subdivision to
6.23read:
6.24    Subd. 45. Program integrity report. Beginning November 30, 2026, and annually
6.25thereafter, the commissioner must provide a report to the chairs and ranking minority
6.26members of the legislative committees with jurisdiction over human services on program
6.27integrity functions within the Department of Human Services. The report must include:
6.28(1) an update from the Background Studies Division within the Office of Inspector
6.29General at the Department of Human Services with historical metrics and descriptive data
6.30on background studies and licensure, including the number of background studies completed
6.31within the past five years and the number of disqualifications that occurred;
7.1(2) an update from the Licensing Division within the Office of Inspector General at the
7.2Department of Human Services with historical metrics and descriptive data, including the
7.3division's capacity to meet licensing demands and data for the past five years on the number
7.4of maltreatment reports and licensing complaints received, the results of maltreatment
7.5investigations, the number of licenses issued for each provider type, the number of licensing
7.6investigations and reviews completed, and the number of correction orders issued; and
7.7(3) an update from the Program Integrity Oversight Division within the Office of Inspector
7.8General at the Department of Human Services that includes summary data related to caseload,
7.9screening and site visit data, the number of provider medical assistance managed care
7.10investigations within the past five years, the number of screening investigations within the
7.11past five years, and updates on closed major fraud investigations."
7.12Renumber the sections in sequence and correct the internal references
7.13Amend the title accordingly
7.14The motion prevailed. #did not prevail. So the amendment was #not adopted.